Dow Chemical outlook now stable, was negative -S&P

NEW YORK, Feb 2 (BestGrowthStock) – Standard & Poor’s on Tuesday
changed its outlook on Dow Chemical (DOW.N: ) to stable, from
negative, removing near-term risks that the company could be
downgraded into junk territory.

S&P rates Dow BBB-minus, the lowest investment grade, and
the stable outlook indicates a rating change is not foreseen
over the next one to two years.

Concerns that Dow’s rating could be cut to junk arose in
2008 on concerns over how the company could refinance a bridge
loan taken on to fund its more than $16 billion acquisition of
rival Rohm & Haas (ROH.N: ).

Dow, which posted a higher-then-expected profit on Tuesday,
said it has repaid the loan and has cut its debt due in 2011 by
80 percent to $2.9 billion. For details see [ID:nN02232111].

The company completed the purchase of Rohm in April 2009.

“Dow’s operating and cash flow performance has improved,
and we expect operating results to continue to improve as
economic conditions recover, which is likely to support further
strengthening of the financial profile over the next one to two
years,” S&P said in a statement.

The cost to insure Dow’s debt in the credit default swap
market rose to around 117 basis points on Tuesday, or $117,000
per year for five years to insure $10 million in debt, from 112
basis points at Monday’s close, according to Markit.


(Reporting by Karen Brettell; Editing by James Dalgleish)

Dow Chemical outlook now stable, was negative -S&P